College: The Flawed Case Against Getting a Degree

The debate over whether college is worth the money got short shrift in one of my recent posts. Let me be clear: I believe an undergraduate degree is worth every penny. But the ranks of those who disagree are growing; their view should not be ignored.

Â· The typical graduate leaves campus with massive debt. College costs have risen faster than inflation for decades, and today two-thirds of those receiving undergraduate degrees have some student borrowing. The average balance: $23,186. Borrowers graduating from a private school may have debts of $100,000 or more. The default rate is rising fast -- to 7% in the most recent measuring period from 5.2% two years earlier. This suggests that many grads aren't able to earn enough to service their loans.

Â· A college diploma does not guarantee a high-paying job. All that debt is fine if you become a doctor, lawyer, accountant, engineer or mathematician. You'll make enough dough to pay back the loans without breaking a sweat. But not so if you become an elementary school teacher, nurse, beat cop, basic web designer, home-health aide or call-center jock. Heck, plumbers and electricians make more straight out of trade school. Professor Richard K. Vedder, of Ohio University and founder of the Center for College Affordability and Productivity, estimates that eight of the 10 job categories where most jobs will be minted over the next decade will not require a college degree. So why encourage your child to be saddled with all that debt?

Â· The lifetime earnings differential has been exaggerated. It's widely held that the average college grad earns $1 million more than non-grads over a lifetime. Universities use that number to justify their tuition hikes. But a more critical look reveals that the average differential is substantially less -- maybe even as low as $300,000. Why spend so much for so little?

Here's my take: if you want to make college costs all about the financial return then, yes, it's not a great deal for some students in ho-hum majors that go deeply into debt at expensive schools. But for just about everyone else college is a wise choice. And even for students who are unlikely to see a decent financial return, college may be worthwhile. Education has value beyond earning potential. Unless your child knows that she really wants to be a hair stylist, how will you ever know where college might have led? You can't put a price on self-discovery -- or even the hope for it.

If you have a question about kids and money, I'll get the answer. Email me at dankadlec@dankadlec.com.

Daniel J. Kadlec is an author and journalist whose work appears regularly in Time and Money magazines. He is the former editor of Time’s Generations section, which was written and edited for boomers. Kadlec came to Time from USA Today, where he was the creator and author of the daily column Street Talk, which anchored the newspaper's business coverage. He has co-written three books, including, most recently, With Purpose: Going from Success to Significance in Work and Life. He has won a New York Press Club award and a National Headliner Award for columns on the economy and investing.